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July 2, 2004 - Government Files Tobacco Case Details
The U.S. Justice Department has set out the blueprint underpinning its accusations that major cigarette companies deliberately misled the public about the risks of smoking for decades. The documents, two volumes of 125 pages each, outline various details to support its case, including the government's claim that each defendant committed at least two racketeering acts and that defendants engaged in a pattern of racketeering activity. The suit, filed by the Clinton administration in 1999, is scheduled to go to trial in September. "Defendants have carried out this massive scheme to defraud through a variety of means, including, but not limited to, causing the public dissemination of numerous false, deceptive and misleading statements," the Justice Department said. It claims there is a reasonable likelihood that the defendants will violate the law in the future and that the United States is entitled to disgorgement of at least $280 billion of allegedly "ill-gotten" proceeds. The defendants in the case include: Philip Morris USA and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Loews Corp.'s Lorillard Tobacco unit; British American Tobacco Plc's Brown & Williamson; and Vector Group Ltd.'s Liggett Group. Defendants also include the Tobacco Institute and Council For Tobacco Research. The tobacco companies say the industry has changed its ways since 1998 because of the landmark settlement with the states that was agreed to in that year. The Justice Department says it will show the defendants did not follow the 1998 agreement and that the tobacco industry has continued aiming its ads at "youth-oriented" publications, and uses "imagery and messages that they know appeal to teenagers." In May, the judge hearing the case, U.S. District Judge Gladys Kessler, denied the defendants' motion to disallow the government's bid for "disgorgement" of some of their past profits. She refused to limit the $280 billion in penalties saying penalties imposed on the industry should be determined at trial. The companies have received permission to appeal that decision.
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